In his note, the analyst said that his firm believes the company is reducing smartphone production by 20 percent because of the "slowing demand for high-end handsets globally," which recently showed up in poor sales of such smartphones at competitors such as Samsung and HTC.
(Read More: What Happened to Unstoppable Samsung? )
Production of the iPhone (which includes the iPhone 4S, the iPhone 5 and the unreleased iPhone 5S) for the last six months of the year will now be between 90 million and 100 million rather than 115 million to 120 million, Blair said.
(Read More: Facebook Can't Save HTC as Earnings Miss: Analyst )
The company is not expected to reduce iPad production, however, he said.
Apple's share price was down almost 1 percent during morning trading.
-By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson